One of the advantages of owning your own home is that the home mortgage interest and real estate taxes paid can be deducted from your federal income tax*.To do so, you'll need to comply with current tax laws and complete the appropriate federal tax forms and itemized deduction schedules. Always consult with your CPA. If you do not currently have a CPA or are not satisfied with your current CPA, call us. Over the years we've had the opportunity to work with some of the top CPA's in the Tampa Bay area. We can arrange a meeting at no charge with one of our CPA referral parnters to ensure you are getting the maximum homeowners deduction on your federal income tax. One additional benefit of working with Excel Mortgage Network, Inc.

Home Mortgage Interest

For your home mortgage interest to be deductible, it must be for a first or second mortgage, a home improvement loan or a home equity loan.Additionally

The mortgage loan must be secured by your main home or a second home

Only interest paid for that tax year can be deducted

The amount you can deduct can be limited if your mortgage balance is more than $1 million ($500,000 if married filing separately) or the mortgage was taken out for reasons other than to buy, build or improve your home.

Points

Points (aka loan origination fees, maximum loan charges, loan discount, or discount points) are generally treated as pre-paid interest. On purchases, the full amount may be deducted in the year paid. However on refinance transactions, the deduction must be taken over the term of the loan. and, as such, the full amount cannot be deducted in the year paid.Rather, the deduction must be taken over the term of the loan.

Real Estate Taxes

State or local real estate taxes can be deducted from your income if they are paid in the tax year.To qualify, the tax must be levied on the property's assessed value, the taxing authority must charge a uniform rate for properties in its jurisdiction, and the tax must not be for your special privilege but for the benefit of the general welfare.

Restrictions on Itemized Deductions

The amount of itemized deductions you can take are restricted by your adjustable gross income.In 2003, the limits were $139,500 for single persons, persons filing as head of household or qualified widow(er), or married persons filing jointly; and $69,750 for married persons filing a separate return.

Non-deductible items

Many of the expenses related to owning your own home cannot be deducted from your income tax.These non-deductible items can include:

Local assessments that generally add value to your home, such as sidewalks, sewers, etc.

Utilities

Domestic help

Depreciation

Check with the IRS

*The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations.Youll need to consult with your tax attorney, CPA, or the IRS for current tax year rules, restrictions and regulations.